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this is Mike Hussein I'm on the faculty
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here at the Wharton School with the
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McNulty leadership program and I have
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the privilege today of speaking with
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Dave nice wonder who is the chief
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executive of the organization that is
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the winner of our annual Lippman family
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prize which comes with a cash award two
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hundred and fifty thousand dollars for
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his service as CEO of the world bicycle
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relief organizations so Dave great to
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have you here for a dialogue hey thanks
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very much Mike it's great to be here
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Dave just to get right into it tell us a
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little bit about the organization and
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its origin and then also bring yourself
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into it how did you get involved sure
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well we're by Scalise about fourteen
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years old this year and started as a
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disaster relief to the Indian Ocean
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tsunami and if you remember in December
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2004 that terrible devastation that took
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place and like all of us sort of looking
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what can we do differently well two
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brothers and a family sort of came
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together and they were the day family
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sort of thinking through what can we do
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differently they had started an
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organization called SRAM corporation
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about 30 years ago SRAM corporation if
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you're not a cyclist is probably not a
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household name but they're the world's
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second largest and us largest bicycle
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component manufacturer making very
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high-end products for Tour de France
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type bikes and FK day and his wife Leah
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and the leaders of SRAM said well what
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can we do we have global operations with
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bicycles make a difference in that
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disaster recovery and with that FK and
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Leah went over to Sri Lanka and and
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spent time with development workers and
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development organizations that were just
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just getting started as far as the
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recovery and then the development and
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and most of them said no no please just
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send us money we're fine but we did find
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a partner and delivered a program of
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about 24,000 bicycles a third of those
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went to health care workers that were
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helping with the disaster recovery a
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third to students that were reconnecting
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with school and a third to entrepreneurs
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an example of the efficient that was
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displaced because of the tsunami now
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having to reconnect with the marketplace
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and from that it was almost going to be
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a one and done but there was a good
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impact study that was done and said you
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know what this made a huge difference
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people with bicycles all the sudden had
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better
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access to healthcare education economic
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opportunities and what should be done
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what happens unfortunately the the two
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hundred and thirty thousand plus people
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that perished in the tsunami well that
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happens every six weeks in sub-saharan
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Africa based upon preventable disease
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hunger and other challenges in mobility
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in Africa is a huge challenge if there's
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over a half a billion people in
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sub-saharan Africa that are in the rural
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areas that means they're primarily
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walking and so our first program
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actually was in Zambia it was a program
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that was funded by the US government
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combating the HIV epidemic this is back
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in 2006 and they had a challenge they
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had 23,000 volunteer health care workers
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that were going doing angels work
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they're going to their community going
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to do home-based care going to work with
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orphans and vulnerable children and they
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had a challenge because they were
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walking long distances and unfortunately
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the bicycles that were there in them in
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the marketplace just were not a very
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high quality and they had those bicycles
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breaking down it was a disincentive the
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care was not getting out they need a
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transportation solution so the folks
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that were running that program reached
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out to FK and that's sort of when I came
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on board at the same time I was actually
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the first employee down on the ground in
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Zambia back in 2007 and started
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implemented program but what we found
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was the bicycles readily available just
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not of high quality and so started
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thinking and designing in FK with his
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background in product development at
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ramp Corporation says you know what well
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we can do is start designing for purpose
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we can start looking and taking our
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expertise at product development that's
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been used at the high end of the cycling
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industry and how can we apply that to
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the lowest part of the economic pyramid
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and with that we've gone through an
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evolution with working with what we now
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call the buffalo bicycles so the
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heavy-duty bicycle that is about 50
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pounds of Steel 50 pounds of love can
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hold over a hundred kg 200 pounds on the
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rear carrier
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has a single-speed durable kickback
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break it's a tool for people to help
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themselves so David that's really
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interesting because you reference of
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course the famous or infamous earthquake
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that came out of Indonesia Indonesia
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sorry call I think was a nine point four
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record recording earthquake at the time
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in a tidal wave tsunami is it's more
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properly puts went throughout the region
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reaching Sri Lanka India much of Africa
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as well and I think from talking with
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many other organizations and individuals
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events of that kind the earthquake that
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hit Haiti the disasters that saved came
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in the earth wake of the earthquake in
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Japan back in 2011 have had a remarkable
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impact disasters they were but bringing
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people into taking some kind of action
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and now thinking about your own
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interweaving of your personal biography
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with that how did you get sure I've been
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with the organization twelve years so I
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was actually the first employee on the
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ground in Zambia which is where we did
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our first program and and my background
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was growing up going to business school
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went on and did a 15 year career in
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investment banking and and primarily
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focusing on how to take banks public and
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with that realizing at 15 years and
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facing down 40 thinking well you know
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what maybe I need to be doing something
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different with my life maybe I need to
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sort of look of something of impact and
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at that time I I fortuitously met f-k
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and his wife Lee on a safari in Kenya
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randomly and with that chance meeting
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got to learn more about the organization
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was really intrigued and a series of
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circumstances opportunities happen and I
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got to Zambia and what I saw was one the
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great need that the the issue of
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distance the issue of people having to
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travel and when their primary mode of
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transportation is by foot how can that
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be overcome and then looking and
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listening to FK who is a leader in the
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bicycle industry saying I think I I
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think I know how we can work on this and
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so we have a motto as all answers are
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found in the field and so spending lots
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of time with the people on the ground
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and listening to them
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and seeing where that opportunity to
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take the top in product development that
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FK and SRAM corporation brought in
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giving a voice to those at the bottom of
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the economic pyramid I was just inspired
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so within that first trip to Zambia I
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actually moved there within six weeks
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went on a sabbatical from my investment
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bank and again that was twelve years
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later so I was about ten years in Africa
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sort of setting up our programs and
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operations look at a country expansion
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program expansion and then recently came
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back to the u.s. to take on the role of
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CEO David Accenture I think you're in
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the best tradition of development
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efforts and that is to listen to the
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people on the ground that your effort is
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intended to benefit and that's been a
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thought around in the work of the World
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Bank of US Agency for International
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Development and many foundations taken
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more seriously by some than others but
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as you listen to those in the field as
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you were looking for your founder was
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looking to somehow assist people in this
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particular region I think Sam Bo is
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where you first got going why did the
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issue of bicycles come up how did that
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that particular need become articulated
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to what do your founder and then as you
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heard it as well we were approached by a
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large US government funded organization
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program that was actually combating HIV
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and AIDS and so this is back in 2005
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2006 and they were training and and and
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putting together an army basically a
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volunteer health care workers that were
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treating people with HIV and AIDS and
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they were doing home based care and
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caring for the over million orphans that
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were created because of that pandemic
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and in Zambia alone and they had a
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challenge they had 23,000 and those
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volunteer health care workers that were
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having to travel long distances to go to
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do the important work they were doing in
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the home-based care and caring for these
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orphans and unfortunately the bicycles
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that were readily available because
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bicycles are part of the culture in the
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end in Zambia and must moach most of
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sub-saharan Africa where a very poor
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quality and so these bicycles we
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affectionately call them bicycle shaped
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objects or be SOS
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these BS OS simply are not up to the
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challenging terrain and condition that
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are found there the suppliers of them
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have become completely disconnected from
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that end user and so with that and in
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the cheapening of the design the
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bicycles fall apart literally as you
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ride these bicycles pedals break off
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wheels collapse they simply don't work
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and so that's where they came to us and
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said is there a way you can help is
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there a way you can look at potentially
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helping us overcome this challenge of
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distance and FK you know took in his
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product development background took the
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best of the bicycles of the that he
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could find in the marketplace and said
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well let's test these out and doing
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testing protocols and what he found is
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that they fail damn it pretty quickly so
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they said well what we can do is sort of
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take the best of the worst and start
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building on that and that's really the
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evolution of our bicycle we call it the
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buffalo bicycle that is a heavy-duty 50
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pounds of love there's a lot of steel in
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that and and can code over 200 pounds on
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the rear carrier so having a reliable
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tool for people to help themselves to be
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empowered to make their own decisions to
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change their own world is really our
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mission they very different from biking
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in let's say the United States you're
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probably a biker I'm a biker
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that's recreational and kind of grew up
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with it as a kid loved to watch the Tour
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de France and bicycles in that sense and
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in the West are often an object of
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leisure of fun of recreation of sporting
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you've just made the point that then in
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some settings bicycles are the necessity
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yeah absolutely there's over half a
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billion people in sub-saharan Africa
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that are living in the rural context
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that means that walking is their primary
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mode of transportation so when you're
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trying to take your sick child to the
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clinic and that clinic is ten miles away
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you're walking there all day to get to
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that child to the clinic or if you're a
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student you're having to walk seven
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miles to get to school one way and
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you're an adolescent girl and their
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safety concerns in that you know having
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a bicycle is really a life changer let
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alone any person that started a business
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or knows about you know
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building up as an entrepreneur
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transportations often part of that
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process and so if you're transporting
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your produce to the market maybe not the
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markets that's the closest but maybe
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that market that's a little further away
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but there's better prices there all
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those things are coming together and
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that's why it's interesting working in
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this field of development because really
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bicycles are cross-sectoral okay we've
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got a couple questions on your business
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model to use a business term here let's
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start with the funding how do you put
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together cash to buy the bicycles sure
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it's sort of interesting I mean we sort
00:11:42
of started off as I said as a disaster
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response and so we got a wonderful
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response from SRAM corporation the other
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industry leaders and in from Trek from
00:11:54
specialized from Cannondale working with
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giant bicycles tata bicycles all those
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people coming together to help us with
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that initial response and continuing
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assistance and then individuals cyclists
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so we've we've sort of grown up with
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grassroots fundraising where we've sort
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of evolved into though as we've studied
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the impact of our programs and started
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being able to do research and so to show
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that actually with a bicycle a girl is
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28% more likely to have improved
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attendance and 59 percent improvement in
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her academic performance a farmer can
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carry and increases income by 23 percent
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using a buffalo bicycle to carry his
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milk to this to the dairy so all those
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things was restricting those information
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we're now starting to you know engage
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more major donors as well as
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institutions and really highlighting the
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issue of distances and in transportation
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what became interesting when we first
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started delivering the improved bicycles
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the Buffalo bicycles into our programs
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what we found is people started knocking
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on our door people started saying hey
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I've seen your bicycle in the field it's
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better than anything else that's out
00:13:05
there
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I want that bicycle I want that bicycle
00:13:08
for my healthcare program I want that
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bicycle because I'm a farmer and I see
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how strong it is I want that bicycle to
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take my kids to school how can i buy one
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now FK and I sir
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scratched our heads and looked at each
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other so okay well what do we do with
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this we as a small nonprofit we weren't
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prepared to fund those philanthropic lis
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through donations but there was a strong
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demand out there so we worked with some
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very good attorneys and Deloitte and
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making sure you know as far as the IRS
00:13:37
and we came up of a very innovative
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structure where we have world bicycle
00:13:41
leaf the nonprofit that owns 100% of
00:13:44
Buffalo bicycles the for-profit entity
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and so Buffalo bicycles sells bicycles
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to nonprofit organizations that are
00:13:53
doing development work in health care
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education some of our big partners
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customers are UNICEF World Vision Care
00:14:01
International those type of
00:14:03
organizations that realize that mobility
00:14:05
and having a strong bicycle in their
00:14:08
program actually helps them achieve
00:14:11
their goals
00:14:11
and helps improve their key performance
00:14:14
indicators to use another business term
00:14:16
but what we're seeing is more and more
00:14:19
individuals are purchasing our bicycle
00:14:21
because it's an interesting design
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challenge when you think about when
00:14:25
you're serving this bottom of the
00:14:26
economic pyramid we could have gone off
00:14:29
and designed a very fancy in a very
00:14:31
strong bicycle at let's say 350 dollars
00:14:34
okay that's a reasonable price for a
00:14:37
good bicycle here in the US well that's
00:14:40
not meeting the customer where they are
00:14:41
that's not serving the markets that we
00:14:43
were serving and so working within the
00:14:46
constraints of the engineering product
00:14:49
development existing supply change
00:14:51
making sure that our bicycle is also
00:14:54
compatible with the existing spare parts
00:14:56
that are readily available it's a really
00:14:59
interesting design challenge and so
00:15:01
again taking that top in product
00:15:04
development knowledge that comes from
00:15:06
SRAM corporation and FK and how can we
00:15:08
apply that to give a voice to that
00:15:11
bottom of the market consumer we've
00:15:13
actually just started opening up over
00:15:14
the last 18 months retail outlets and
00:15:18
these are Buffalo bicycle shops small
00:15:20
little shops right there on the main
00:15:22
drag and in different regional towns
00:15:24
throughout Zambia Zimbabwe Kenya Malawi
00:15:28
and we're seeing great uptake we're
00:15:30
seeing that individuals when given a
00:15:32
choice when given
00:15:33
voice they will go for the buffalo
00:15:35
bicycle truly interesting Dave in a
00:15:39
sense that it sounds like you're a bit
00:15:40
of a hybrid between a purely
00:15:43
philanthropic driven organization where
00:15:46
you have the product that people need
00:15:48
and you'll give it to them often what
00:15:51
happens in the immediate relief after a
00:15:53
disaster the Red Cross comes in and and
00:15:55
whatever's required is given away to
00:15:58
those much in need but you're also
00:15:59
letting the market speak a bit so those
00:16:02
who have a real need for a bike at an
00:16:05
affordable price point are able to walk
00:16:07
in and get what they really couldn't get
00:16:09
from any any other provider in the
00:16:11
region that sound about right it does
00:16:13
it's it's interesting well first of all
00:16:15
with with F K's background with SRAM
00:16:17
corporation my business background we
00:16:20
really sort of approached the whole
00:16:23
organization the growth organization is
00:16:24
how can we apply best business practices
00:16:27
to development and one of the first
00:16:29
things with best business practices is
00:16:31
know your customer know your environment
00:16:33
and I think there's a challenge with a
00:16:35
lot of development programs and
00:16:37
organizations a lot of times it's
00:16:39
top-down you know we have an idea that
00:16:42
we think we should implement our motto
00:16:44
of all answers are found in the field
00:16:46
and so you go and you understand and be
00:16:48
empathetic to those customers where they
00:16:50
are what their needs are and you and you
00:16:53
give them a voice and so I think that's
00:16:55
the difference in in what we're trying
00:16:57
to achieve to make it kind of a personal
00:17:00
moment if I'm in a speaker the capital
00:17:02
of Malawi a long way and I'm thinking I
00:17:06
could really use a bike in this region
00:17:08
because I'm doing some back roads so
00:17:10
looking at some of the agricultural
00:17:11
development projects can I walk into a
00:17:14
bike shop and buy one of your bikes you
00:17:17
can you can we have actually two outlets
00:17:19
in the long way currently a buffalo
00:17:21
bicycle standalone shop which is in the
00:17:23
main shopping area of the long way as
00:17:26
well as our assembly facility and to
00:17:29
give our listeners and viewers and
00:17:30
readers a sense for what it means to buy
00:17:33
that product in the capital of Malawi
00:17:36
you can walk into stores near here by
00:17:38
cycle shops near here and spend a couple
00:17:41
thousand dollars and even much more for
00:17:43
an extremely high-end
00:17:45
roadbike what's what's your average
00:17:48
retail price for the lady
00:17:51
yeah in a long way it's about a hundred
00:17:52
and forty five dollars it varies by
00:17:55
different countries because of the
00:17:56
different cost of transportation and
00:17:58
import tax and duties that are
00:18:00
unfortunately even put on the bicycles
00:18:02
as they come in so about one hundred and
00:18:04
forty five dollars which when we compare
00:18:06
to the bicycle shaped objects is often
00:18:08
twice the amount of what they are and so
00:18:12
it was a real question for us it was
00:18:14
really an open question of will this
00:18:16
value proposition of quality and price
00:18:18
be the right fit for that marketplace
00:18:21
and so what we really were going out to
00:18:24
try to figure out is is this going to
00:18:26
work is is this really going to be
00:18:28
something that we can be driven but
00:18:30
that's what we found is in fact what is
00:18:32
it's the right value proposition for
00:18:34
that market and I'm thinking among the
00:18:36
distinctive features is probably a
00:18:37
couple gears not hydraulic brakes and a
00:18:42
very big carrier on the back wheel well
00:18:45
we're working on gears that's the big
00:18:47
challenge quite frankly we have to it's
00:18:49
expensive and not derale eur which is
00:18:52
your typical you know change it there's
00:18:54
a lots of issues with that first of all
00:18:55
it's very vulnerable out there as you're
00:18:57
out there clunking around and and and
00:18:59
doing different things and again the
00:19:01
terrain and conditions we have a saying
00:19:04
also that africa probes for weakness so
00:19:07
when you have open mechanics like that
00:19:10
let alone the cable and housing to get
00:19:11
to that activator it's that's that's
00:19:14
vulnerable and so what we have actually
00:19:17
a standardized as a coaster hub so it's
00:19:19
a contained hub that's sealed
00:19:21
that's a kickback break so the braking
00:19:23
system and the drivetrain is all sort of
00:19:25
contained within that rear hub what
00:19:27
we're working on is how do we get
00:19:28
multiple drivetrain that's reliable
00:19:32
repairable durable in that context
00:19:35
that's built for that context and
00:19:36
actually we have top engineers around
00:19:38
the world focused on that advanced
00:19:40
product development to create a new
00:19:42
category of product that's for this
00:19:44
marketplace okay the last question about
00:19:47
your business model I'm a Malawi farmer
00:19:52
mm-hmm I'm gonna have a lot of cash
00:19:54
after I sell my crop but I don't have a
00:19:56
pen
00:19:56
right now so can I make this a some kind
00:20:00
of GE Capital kind of loan to get me
00:20:03
going in it can I borrow the money yeah
00:20:05
absolutely we started to talk about sort
00:20:08
of a three-legged stool if that makes
00:20:10
sense as far as reaching this consumer
00:20:13
we want to have one the right product so
00:20:15
the product and the right quality value
00:20:17
proposition secondly we have to have the
00:20:19
distribution so making sure that we have
00:20:21
the shops that are out there making it
00:20:23
accessible as it relates to physical
00:20:25
locations third it has to be sort of
00:20:28
financial accessibility and so we have
00:20:31
programs of microfinance we partner with
00:20:33
microfinance organizations we have Leia
00:20:35
ways where you sort of pay as you go so
00:20:38
they can pay for the bicycles over three
00:20:40
to six months it's great let's think
00:20:43
about the future I think you cited
00:20:45
earlier on reaching some 400,000
00:20:47
recipients so far let's take it five
00:20:50
years forward is now 2024 Wow what's
00:20:54
your target number I think we're gonna
00:20:56
be in the millions of bicycles at that
00:20:58
point I think part of what we're doing
00:20:59
is one raising the awareness of the
00:21:02
challenge of distance and the fact that
00:21:03
the quality bicycle can really help
00:21:05
overcome that barrier of distance so I
00:21:08
think we're going to get more and more
00:21:09
we want to be the mobility solution
00:21:11
within larger development organizations
00:21:13
and so spending time with development
00:21:16
leaders that are doing programs in
00:21:18
healthcare education how can we be a
00:21:20
mobility solution to help them out and I
00:21:23
think this this individual market this
00:21:25
you know there as I said over half a
00:21:28
billion people living in the rural areas
00:21:30
in sub-saharan Africa alone that are
00:21:33
looking to that are most likely walking
00:21:36
as their primary mode of transportation
00:21:37
and with that a bicycle could be really
00:21:40
helpful quality bicycle make a
00:21:42
difference and I think we're also be
00:21:44
expanding outside of sub-saharan Africa
00:21:47
and be looking at other areas in South
00:21:49
America we've done programs in Southeast
00:21:51
Asia as well there's 450,000 bicycles
00:21:54
are in 219 countries so Dave to borrow a
00:21:58
phrase from zero to a million in just a
00:22:00
few years and from your experience
00:22:02
looking back you've been there pretty
00:22:04
much from the start for those who are
00:22:07
interested in become
00:22:09
involved in in this world not
00:22:11
necessarily bikes but providing services
00:22:14
and everything else that much needed in
00:22:17
many regions of the world including
00:22:18
obviously microfinance what are a couple
00:22:21
of the kind of experience founded
00:22:25
principles did you operate on now that
00:22:28
others could make use of sure that's a
00:22:30
great question I think looking at you
00:22:33
know listening to best practices and
00:22:36
development that would include focusing
00:22:39
on the field having a field focus versus
00:22:41
having a focus that is about of
00:22:45
following the money so I think it's
00:22:47
important for us to sort of think
00:22:49
through and make sure that we are
00:22:52
listening to the end user and making
00:22:54
sure that we are also working in
00:22:56
collaboration we have a model of
00:22:59
partnership so our model doesn't work
00:23:01
unless there's a partnership in the
00:23:04
field when with the communities that we
00:23:06
work with as well as other leading non
00:23:08
nonprofit organization development
00:23:10
organizations as well as the government
00:23:11
so we're working closely with the
00:23:13
ministries of Education and the minister
00:23:15
now so it's a collaborative effort I
00:23:17
think you know the focus that we've also
00:23:20
you know are what I would say our
00:23:21
flagship or program is focusing on girls
00:23:24
education and girls in that area in the
00:23:27
developing world to have the toughest
00:23:30
time of any demographic clearly and so
00:23:33
educating girls truly helps break that
00:23:36
cycle of poverty and disease and so what
00:23:39
we found with our program providing a
00:23:42
bicycle which in that context in the
00:23:44
rural context of sub-saharan Africa that
00:23:46
bicycle is going to be the most valuable
00:23:48
asset in that household all the sudden
00:23:51
you tie that girl's education to that
00:23:54
most valuable asset it changes her
00:23:56
negotiating power and Al's her to have a
00:23:59
voice and what her future looks like so
00:24:01
we're really excited to see that we
00:24:03
actually have a randomized control trial
00:24:05
study that's coming out by innovations
00:24:07
for poverty action and it's showing
00:24:10
great improvement as it relates to not
00:24:12
only educational outcomes but also girls
00:24:14
empowerment outcomes
00:24:16
a final question for you as the
00:24:19
recipient of the 2019 lip
00:24:21
family prize a cheque of $250,000
00:24:25
is in your hands and as you think about
00:24:28
its immediate application nothing to be
00:24:31
written down here but just thinking out
00:24:32
loud what do you intend to I don't know
00:24:36
leverage with that or make happen now
00:24:38
that you have it well first of all we're
00:24:40
very grateful for the Lippman family
00:24:42
prize as well as you know this option
00:24:44
awesome opportunity to engage with the
00:24:46
University of Pennsylvania community so
00:24:48
we're very excited about that as it
00:24:50
relates to the financial gift we're very
00:24:53
grateful and excited to be able to
00:24:55
expand our impact and and deliver more
00:24:58
bicycles to students to healthcare
00:25:00
workers to create the availability for
00:25:03
entrepreneurs it really goes a long way
00:25:06
so we're very excited about that it's
00:25:08
great for somebody who'd like to find
00:25:10
out more about your operation and where
00:25:12
would they go sure we have a great
00:25:13
website choose check us out at
00:25:18
www.davidpakman.com
00:25:22
[Music]
00:25:34
you
